Spring Statement: MTD extension ‘costly and confusing’

The expansion of Making Tax Digital to millions more self employed individuals earning as little as £20,000 will be a challenge as HMRC withdraws free filing software used by over four million taxpayers

The Low Incomes Tax Reform Group (LITRG) is calling on HMRC to consider easements to help taxpayers who may initially struggle to meet the requirements using third party software, which will raise costs for the 4.5 million taxpayers who currently use HMRC free software.

Under the rules confirmed at the Spring Statement, HMRC will require tax returns to be supplied through third party software for everyone forced to file quarterly under Making Tax Digital for Income Tax.

There will no longer be free filing software supplied by HMRC, which was used by over a third of taxpayers in self assessment. In total, 4.5m taxpayers in 2023-24 tax season ending in January used the free software.

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